Chinese Firm Builds-up Pharma with $85m

An aggregate of five billion units of capsules and tablets will be produced a year

SanSheng-Pharmaceutical-Factory

SanSheng Pharmaceutical, a wing of the publicly listed Chongqing Sansheng Industrial Company in China, begins the first phase of production this month amidst a shortage of medical drugs. The pharmaceutical manufacturing plant is located inside the Chinese held Eastern Industry Zone in Dukem.

Lying on 16.7ha of land, the factory has been under construction since 2016 and was completed last December. For the installation, SanSheng, which has a starting capital of 85 million dollars, spent 20 million dollars. Drugs such as anti-pain drugs and antibiotics will be produced in the first phase of production, with plans of more to be added in subsequent phases.

Drugs are produced in tablet and capsule form, as well as in small and large volume parenteral. An aggregate of five billion units of capsules and tablets will be produced per year in the first phase. Three hundred million small and 10 million large volume ampules will also be manufactured.

“In entering the market, we planned to cater to the domestic as well as the global market in equal measures,” says Alemayehu Sileshi, sales and marketing manager of SanSheng. “What made Ethiopia attractive was improving infrastructure and the bilateral relations between the country and China.”

The company is eyeing East African nations such as Kenya, Sudan and Tanzania as export destinations.

Currently, SanSheng has 300 employees, out of which 270 are Ethiopians while the rest are Chinese.

Until 2016, there have been only two pharmaceutical manufacturers. The government has a target to increase their numbers to five and then 20 during the current and subsequent Growth & Transformation Plans (GTPs). The plans also aim for 30 million dollars in export revenues by 2020, and 80 million dollars five years after that.

The nation hosted 304 pharmacies, 250 drug shops and 1,950 rural drug vendors until the past year, of which around 95pc are privately owned, according to the World Health Organisation (WHO). The government procures over six billion Birr worth of pharmaceuticals, while also receiving a similar amount from development partners.

The annual pharmaceutical market in Ethiopia is estimated to be worth 400 million dollars to half a billion dollars and growing at a rate of 25pc yearly. Local manufacturers can satisfy less than a fifth of the local demand.

The nation has recently been hit by a shortage of pharmaceutical supply owing to the severe shortage of foreign currency that has been noticeable since last year. Insulin and drugs for hypertension have not been as abundant on the shelves of pharmacies.

The priority for the nation is closing the local gap in demand and supply, and then move on to worrying about export performance, according to a representative from the Ethiopian Investment Commission (EIC) whose name Fortune withheld upon request.

Such investment is in keeping with the high trend of flow of foreign direct investment (FDI) this past couple of years. FDI grew by almost 28pc last year and by 22pc with 2.2 billion dollars worth of investments recorded in the first half of the current fiscal year.